The Property Council of Australia today welcomed the release of a discussion paper by the NSW Treasurer which examines how the states and the Commonwealth can work together to build a stronger economy, encourage state led-reform and deliver better value for tax payers.
The review, established by the NSW Government in the 2019 State Budget, will examine the NSW revenue system with a focus on Commonwealth funding arrangements including the design, complexity and number of funding agreements.
“The NSW Government is to be applauded for taking the lead on this important national dialogue,” Ken Morrison, Chief Executive said today.
“There is a clear opportunity here to put key reform initiatives at the forefront – reforms to improve productivity and how our tax system works.
“Our growing cities are highly productive places, producing much of our nation’s economic growth; we need to ensure we have our tax structures right to encourage investment, growth and increased productivity in the years ahead.”
Mr Morrison urged caution saying that while the discussion paper set out some of the challenges clearly and well, the reform challenge should not be underestimated.
“Almost everyone agrees that stamp duty is an inefficient and ‘bad’ tax, but getting rid of it will be an enormous challenge with policy as well as political risks,” Mr Morrison said.
“Stamp duty cannot be simply swapped out for another new tax; the full impacts of such a change would need to be examined and the benefits and consequences fully explored.
“But doing nothing is not a sensible or fiscally responsible option.”
“We welcome the review’s focus on how federal and state governments can work together to boost productivity and deliver services.
“We believe that City Deals have a very important role to play in supporting productivity in our fast growing urban areas where aligning the different plans of government is more important than ever.”
The NSW Review of Federal Financial Relations discussion paper has been prepared by the independent panel behalf of the NSW Review of Federal Financial Relations chaired by David Thodey.